It’s that time of year again. On Wednesday we watched George Osborne deliver his third Budget.
Now that there’s been time for you to digest the announcements he made we wanted to assess what the impact will be for you and your business. We’ve boiled down the key points into an infographic that you can view and share online:
It was an hour jam-packed with new measures designed to help individuals and businesses alike. John Cridland, Director General of the CBI, told journalists afterwards that, “the Chancellor has focused his firepower on areas that have the potential to lock in growth”.
So, then, without further ado, here are our top takeaways from Wednesday’s Budget:
1) More support for exporters
There was a strong focus on export as a key way for UK businesses to make their mark on the global economy. Up until now many businesses have been frustrated by the lack of support for exporters, particularly when they approach high street banks with requests for finance.
The Chancellor announced that he would double the amount of export finance available through UKTI (UK Trade and Investment) to a total of £3bn. He also said that interest rates on that finance would fall.
Traditional invoice finance providers have often seen foreign debtors as less desirable, and often banks have been unwilling to lend to exporting businesses. On the flip side, at MarketInvoice we already help hundreds of exporters with cashflow.
Our CEO, Anil Stocker, said yesterday:
“The measures announced in the budget today should help allay these concerns and will complement the support that UK exporters are already being provided by MarketInvoice.
More than £50m worth of export invoices has been funded through our platform to date, helping SMEs finance their international strategies in all corners of the globe.”
2) Encouraging investment
George Osborne announced that the Annual Investment Allowance would double from 1st April 2014. Businesses will now be able to invest up to half a million pounds tax-free, and this is a measure that is guaranteed to stay in place until at least 2015.
The hope is that the chunkier allowance will help businesses that need more capital investment in the early stages- businesses like printers, manufacturers and others who use expensive machinery.
3) Access to finance
Announced in the fine print of the Budget report were two significant developments in helping SMEs access the finance they need.
Alternative lenders like MarketInvoice have been lobbying government for months to mandate the banks to give better advice to their SME clients. The idea is that the banks should tell any rejected business about the finance options that might be right for them, referring them to alternatives like invoice trading platforms or peer-to-peer lenders.
The government has now committed to a consultation to see what legislation might be needed.
Secondly, the Budget fine print revealed that the government has now agreed with the banks that any claim for a ‘deed of priority’ or ‘waiver’ needs to be processed within seven working days. That means that the application process for businesses that want to complement their bank’s facility with an alternative finance facility should now be significantly smoother.
4) Enterprise Zone scheme extended
The Enterprise Zone scheme, where areas around the country support new and expanding businesses through rates relief and simplified planning measures, has been extended until 2017.
The 24 zones throughout the country will continue to benefit from existing incentives for business, and should see growth as a consequence.
5) Energy costs cut for manufacturers
If your business manufactures then you’ll be interested to hear that the ‘carbon floor’ price was frozen in a £7bn scheme to cut energy bills. The Chancellor announced that:
“I am capping the Carbon Price Support rate at £18 per ton of CO2 from 2016-17 for the rest of the decade.
This will save a mid-sized manufacturer almost £50,000 on their annual energy bill.”
6) Early stage businesses
Two boosts to early stage businesses were announced. The SEIS (Seed Enterprise Investment scheme) was made permanent, meaning that investors in new companies will continue to see tax relief on their investments.
Research and development was also encouraged with an increase in the tax relief available to loss-making small businesses that invest in R&D, up from 11% to 14.5%.
This Budget came at a key time. Growth forecast for 2014 by the Office of Budget Responsibility looks strong, at 2.7%.
We’re keen to hear what you think of the new measures announced. Do you think they’ll have an impact on your business? What else would you have liked to see? Get in touch on Twitter, Facebook and LinkedIn and let us know your thoughts.